Davidson; Management - 3rd Australasian Edition



1.
Bank failures are now treated as a remote contingency at best.
A. True
B. False


2.
Regional and industry recessions were and still are a major cause of bank failures.
A. True
B. False


3.
Regulatory dialectic is a process in which regulated financial institutions also have an incentive to try to avoid regulation.
A. True
B. False


4.
Bank panic leads to bank runs.
A. True
B. False


5.
Federal deposit insurance (FDIC) has prevented widespread bank panics.
A. True
B. False


6.
The Australian Reserve Bank Act 1959, which created the Reserve Bank of Australia (RBA) and defines its constitution, powers and responsibilities.
A. True
B. False


7.
The aim of prudential regulation is to regulate banks.
A. True
B. False


8.
Banks hold adequate capital to make loans.
A. True
B. False


9.
APRA uses the probability and impact rating system (PAIRS) to assess the performance of Australian Deposit Institutions.
A. True
B. False


10.
Liquidity in bank management means having cash available in the bank vault.
A. True
B. False


11.
RBA has the responsibility to ensure that the financial system is stable and operates efficiently.
A. True
B. False


12.
A bank which wants to stay competitive and survive should practice liquidity management.
A. True
B. False


13.
The Uniform Consumer Credit Code is based on the principle of equity and fairness.
A. True
B. False


14.
Tier 1 (core) capital includes items that are essentially of a permanent nature, including hybrid instruments that have characteristics of both debt and equity.
A. True
B. False


15.
The increasing innovation and sophistication within the finance sector, have led to the development of Basel II in refining bank's capital adequacy requirement.
A. True
B. False


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